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Industry letters to President Obama underscore importance of RFS targets

A flood of letters from biofuel organizations, biofuel producers and commodity organizations to President Obama this month underscore the importance of the Renewable Fuel Standard (RFS) to national security and the environment, as well as to the biofuel industry, agriculture and rural communities. If left to stand, the EPA’s proposal to drastically reduce RFS blending targets for 2014 could have dire effects on all. EPA’s final ruling setting 2014 volume requirements for renewable fuels is expected next month. However, Greenwire has reported that EPA has yet to send the rule to the White House Office of Management and Budget for review.Today, the National Biodiesel Board (NBB) sent a letter to President Obama asking that he stand behind his past support for the U.S. biodiesel industry by continuing sustainable growth under the RFS. The letter was signed by 117 biodiesel companies and affiliated businesses from 41 states. The American Soybean Association and several state soybean growers associations also signed the letter.

EPA’s current RFS proposal would set a biodiesel standard of 1.28 billion gallons, well below the industry’s 2013 production of nearly 1.8 billion gallons. Read the letter from NBB.

“As entrepreneurs and business leaders representing thousands of employees, we have followed signals from this Administration and invested billions of dollars in developing a U.S. biodiesel industry that has successfully delivered more than 5 billion gallons of EPA-designated Advanced Biofuel under the RFS since you took office,” the letter states. “We are extremely concerned that you could be retreating on your previously unwavering support for biodiesel in a way that would have severe consequences for the industry’s future” the letter states.

Last week, the Advanced Ethanol Council (AEC), the Biotechnology Industry Organization (BIO) and 33 advanced biofuel companies also wrote the President expressing their concern about EPA’s proposed cuts to blending targets. The full copy of the letter is available here.

“The RFS is necessary because the highly consolidated, vertically integrated oil industry is not otherwise going to cede market share to renewable fuels,” they wrote. “It is an unfortunate reality that current fuel markets do not properly reward innovation, and that any effort to curb oil dependence and reduce carbon emissions in the sector will require effective policies like the RFS.”

Inconsistent Interpretation

“To reduce the 2014 blending requirements and volumes in future years, EPA is proposing to use its general waiver authority based on ‘inadequate domestic supply,’” the letter went on to state. “But EPA is putting forward a novel interpretation of the word ‘supply’ to mean the ability of current infrastructure to deliver renewable fuel blends to consumers, instead of the available supply of renewable fuel to obligated parties. We believe that this new interpretation is inconsistent with the plain meaning of the statute and its legislative history. But the bigger issue is that this interpretation has the practical effect of handing the future trajectory of the RFS to the oil industry by virtue of the fact that the oil industry itself controls the distribution of fuel to consumers. Simply put, the proposal converts obligated parties under the Clean Air Act into non-obligated parties.”

And, on May 8, the National Corn Growers Association (NCGA) wrote to the President, noting that the proposal to significantly reduce the renewable fuel content of gasoline and diesel “would make us more oil dependent, effectively gut the bipartisan Renewable Fuel Standard, strand billions of dollars in private investment, and send emissions of carbon dioxide and other pollutants sharply higher.”

The NCGA’s letter went on to cite a recent analysis by BIO showing that the EPA’s proposal to reduce blending targets would actually increase carbon pollution emissions by 28.2 million metric tons in 2014 alone. “To put this in perspective, the impact would be equivalent to adding 7 new coal fired power plants or cancelling every wind farm project currently under construction in the United States.”